The aim of the plan is to combine the objectives of the shareholders and the key employees in order to increase the value of the Company in the long run, to commit the key employees to the Company, and to offer them a competitive reward plan based on holding the Company’s shares.
The plan includes three discretionary periods, which are the calendar years 2018, 2019 and 2020. Valmet’s Board of Directors shall decide on the performance criteria and targets in the beginning of each discretionary period. The potential reward from the discretionary period 2018 is based on Valmet’s Comparable EBITA margin and orders received growth (%) of the stable business, that is, the Services and Automation business lines. The potential reward from the discretionary period 2018 will be paid partly in Company shares and partly in cash in 2019. The proportion to be paid in cash is intended to cover taxes and tax-related costs arising from the reward to the key employee.
Furthermore, the members of Valmet’s Executive Team are recommended to own and hold an amount of Company shares equaling to their gross annual base salary (100 percent ownership recommendation).
The rewarded shares may not be transferred during the restriction period, which will end two years from the end of the discretionary period. As a rule, no reward is paid if the key employee’s employment or service at Valmet ends before the reward payment. Should a key employee’s employment or service end during the restriction period, he or she must, as a rule, gratuitously return the shares given as reward to the Company.
The plan is directed to a total of approximately 120 participants, of which 80 are key employees in management positions (including Executive Team members), and 40 are management talents, which is a new target group in Valmet‘s share based incentive plan. The total combined reward to be paid based on the plan is capped to an approximate maximum of 586,000 shares in Valmet Oyj, representing the gross reward before the deduction of taxes and tax-related costs arising from the reward.